Minimum allocation regulation
| Basic data | |
|---|---|
| Title: | Ordinance on the minimum premium refund in life insurance |
| Short title: | Minimum allocation regulation |
| Abbreviation: | MinZV |
| Type: | Federal Ordinance |
| Scope: | Federal Republic of Germany |
| Legal matter: | Insurance regulatory law |
| References : | 7631-11-3 |
| Original version from: | April 4, 2008 ( BGBl. I p. 690 ) |
| Entry into force on: | April 12, 2008 |
| Last revision from: | April 18, 2016 ( BGBl. I p. 831 ) |
| Entry into force of the new version on: |
April 22, 2016 |
| Last change by: |
Art. 5 Regulation of July 19, 2017 ( Federal Law Gazette I p. 3023, 3024 ) |
| Effective date of the last change: |
August 1, 2017 (Art. 7 of July 19, 2017) |
| Please note the note on the applicable legal version. | |
The Regulation on the minimum premium refunds in life insurance , also known as minimum supply regulation or abbreviated as MindZV called, is one for German life insurers existing regulation, in the regulations to a reasonable profit participation of policyholders have been adopted.
background
The ordinance issued in April 2008 regulates the minimum amounts a life insurer has to add to the provision for premium refunds (RfB). Unlike its predecessor, the Ordinance on the Minimum Premium Refunds in Life Insurance (ZRQuotenV), the MindZV provides uniform rules for all policyholders. Previously, there were different regulations for old and new buildings , i. H. on the one hand for contracts that were concluded up to the deregulation of the German insurance industry - the abolition of the regulatory approval requirement for tariffs and insurance conditions in 1994 - and on the other hand for contracts signed since then according to tariffs not requiring approval. With the new regulation, a requirement of the Federal Constitutional Court from 2005 was also implemented. At the time, the latter complained that losses from one source of income could be offset at will with surpluses from other sources, thus reducing participation in the latter. The scope of the admissible compensation is now regulated. Since 2014, the calculation details of the security assets that limit participation in the valuation reserves and the maximum permissible amount of the RfB have been determined here.
Procedure
According to the Insurance Reporting Ordinance, the gross surplus of the insurance company according to commercial law had to be divided into the sources of capital investment, risk and other result. Policyholders are to participate appropriately in every positive source of income, with losses in investment income being offset against surpluses in other income.
This limits the unlimited possibility, criticized by the Constitutional Court in 2005, to compensate for loss-making and profitable sources of income. The insurer must compensate for deficits in risk and other result from its share of the other result sources; so they are not borne by the policyholder.
The regulation contains a formulaic lower limit for the determination of an inappropriate participation in the individual result sources. According to this, the allocation to the RfB, if necessary taking into account the direct credit, must be so high that it corresponds to the sum of 90% of the total investment income proportionally attributable to the liabilities of the policyholders, minus the expense for discounting the actuarial reserve, of 90% of the risk result and corresponds to 50% of the remaining result. The minimum allocation is to be calculated separately for the old stock and for the new stock and to be observed.
Participation in the valuation reserves
According to Section 56a VAG, the right to participate in the valuation reserves was limited by the need for security. The MinZV regulates details for determining this limit.
Upper limit for the provision for premium refunds
The RfB contains the share of the community of policyholders in the surpluses already achieved by the insurer that have not yet been distributed to individual policyholders. In order to ensure that the surpluses achieved are largely distributed to the policyholders who caused them, the funds may not remain in the RfB indefinitely. If the insurer has not yet made a specific regulation about the intended allocation of funds from the RfB to individual policyholders, the amount of the RfB is limited by the MinimumZV. This part of the RfB, for which no regulations have yet been made, is called the free RfB. This free RfB must not be higher than twice the distribution planned for the following year (which itself does not belong to the free RfB), plus an amount that depends on the current solvency margin and the capital market interest rate. This does not, however, affect Section 21 of the KStG , according to which an unpaid RfB that exceeds the allocation for the last three years is not tax-deductible.
